U.S. sues to stop AT&T - Time Warner deal

The U.S. Department of Justice sued AT&T to block its $85 billion acquisition of Time Warner, but analysts say it's setting itself up to lose. Fred Katayama reports.

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AT&T is likely to win the legal battle against the Justice Department over its $85 billion acquisition of Time Warner. That's what analysts are saying the day after
the U.S. Department of Justice sued to block the acquisition.
The DOJ says the deal would allow AT&T to charge higher rates for Time Warner content to its rivals and streaming services, and that would harm competition.
But AT&T says the merger is critical for the company to compete with Netflix and Amazon Prime Video.
CFRA's senior equity analyst Angelo Zino sys AT&T stands a very good case at the courts.
(SOUNDBITE) ANGELO ZINO, SENIOR EQUITY ANALYST, CFRA RESEARCH (ENGLISH) SAYING:
"It's essentially a vertical deal in nature. So, you're not eliminating any participants from the market. Let's say, in a case that you would see should a Sprint and T-Mobile deal have ever transpired. So, you're not necessarily taking anybody out of the market. And, if you, actually, look at who the market share taker is in the space, it's actually a lot of the internet service providers that are out there, whether it be the Netflixs of the world and Amazons of the world."
AT&T says it's prepared to go to trial, ideally in the next 60 days.
The DOJ's lawsuit is the first major challenge to a merger by the administration of U.S. President Donald Trump.
Trump has repeatedly criticized Time Warner's CNN network. He also voiced his opposition to the deal before the election last year, saying it would concentrate too much power in AT&T's hands.
Time Warner's shares rose on the news. AT&T traded in the red.

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